​ *Actual Hours Are Equal to Standard Hours for Units Produced.​

question 165

Multiple Choice

​
*Actual hours are equal to standard hours for units produced.​
-A company records its inventory purchases at standard cost but also records purchase price variances. The company purchased 5,000 widgets at $8.00 each, and the standard cost for the widgets is $7.60. Which of the following would be included in the journal entry?

• A)debit Accounts Payable, $38,000
• B)credit Direct Materials Price Variance, $2,000
• C)debit Accounts Payable, $2,000
• D)debit Direct Materials Price Variance, $2,000

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Definitions:

API GL-5

A classification of lubricants set by the American Petroleum Institute (API) for gear oils with high-performance properties, used in axles and transmissions.

Synthetic Gear Lube

A lubricant made from chemically engineered materials designed to provide superior protection and performance in vehicle gearboxes.

Spinout Failures

A tandem drive axle failure in which one of the four drive wheels loses traction and receives all driveline torque. Spinout conditions may produce wheel speeds four times greater than specified. Spinout failures result from shock loading when a spinning wheel’s motion is suddenly arrested or by lubricant throw-off from rotating components.

Riveted Crown Gear

A type of gear whose teeth are affixed to the wheel or rim using rivets, often used in machinery for transmitting torque.